Wage-law critics ponder next move
By Bob Quick The New Mexican
Managers of some Santa Fe
restaurants were mulling price increases and other measures in the wake of
Wednesday’s City Council vote to carry out a Jan. 1 increase in the city’s
minimum wage.
Fewer overtime hours and reduced health benefits for
some workers could result from the new $9.50-an-hour requirement for
businesses with more than two dozen workers, restaurateur Al Lucero said
Thursday.
“I think the City Council has literally created
economic havoc in the city of Santa Fe,”
said Lucero, owner of Maria’s New Mexican Kitchen. “They succumbed to the
pressure of the unions and the do-gooders who never had to make a payroll in
their lives.”
Price increases wouldn’t surprise backers of the
minimum-wage law and economic experts who have testified on their behalf.
However, they have insisted that small increases won’t harm affected
businesses and wouldn’t outweigh the need to provide a “living wage” to
lowincome workers.
University of Massachusetts-Amherst professor Robert
Pollin, testifying last year about how Santa Fe
businesses could adjust to a higher minimum wage, said, “The most likely way
is raising prices to absorb the cost increases.”
Some representatives of service-oriented businesses,
however, reacted with bitterness to the council’s 7-1 vote against delaying
the scheduled wage hike until more information is available. A study
commissioned by the city on how the current $8.50-an-hour wage floor has
affected Santa Fe’s economy since
taking effect in mid-2004 won’t be completed until at least May.
Lucero said he didn’t go to Wednesday’s council
meeting at Sweeney Convention
Center because the outcome of Councilor David
Pfeffer’s effort to delay the higher minimum wage was “predetermined.”
Simon Brackley, interim president of the Santa Fe
Chamber of Commerce, was among a handful of wage-law opponents who did speak
at the council meeting. He predicted Thursday that things would get worse for
both businesses and workers affected by the ordinance.
Referring to a preliminary report by the Bureau of
Business and Economic Research, he said, “More than 60 percent of the
businesses in the survey said they planned to raise prices and 44 percent to
cut overtime. I would anticipate more of the same in terms of those trends.”
The general manager of Eldorado Hotel said Thursday
that he doesn’t expect to cut employee hours and plans to go ahead with
renovations at the downtown hotel and its Old House Restaurant.
But Rich Verruni said it is important that the city
and state do more to bring tourists to Santa Fe
to help his hotel — the city’s largest — and others at a time when expenses
of all kinds are rising sharply.
A number of business groups and owners had placed
their hopes in a lawsuit filed in state District Court in 2004 to block the
city ordinance. The plaintiffs argued that the City Council lacked authority
to pass such a law.
But one person familiar with the lawsuit, which the
state Court of Appeals rejected Nov. 29, said Thursday that the case may have
reached the end of the line because the plaintiffs are not interested in
appealing it to the state Supreme Court.
Plaintiffs in the court appeal — who included the
Chamber of Commerce, New Mexicans for Free Enterprise, owners of the Zia
Diner, Santa Fe Bar & Grill and San Francisco Street Bar & Grill, as
well as a company that owned the Santa Fe Hilton — have until Monday to
decide whether to appeal to the high court.
A separate legal challenge against the ordinance was
filed recently in federal District Court by Heritage Healthcare. But the political
fight may shift next month to the state Legislature, where efforts to
pre-empt local wage laws are expected during debate over raising the
statewide minimum wage to $7.50 an hour from $5.15 an hour.
As a result of the city’s action, Lucero of Maria’s
restaurant said, he “might have to look at cutting benefits” for employees,
such as health insurance, bonuses and paid vacations.
“After Jan. 1, nobody will work any overtime,” he
said. “That used to be our way of rewarding good workers. Rather than working
another job, we would let them work another 20 hours. We can’t afford to do
that now.”
As for prices, “we haven’t had a price increase since
before 2000,” he said. “It looks like we might address that and take some
kind of price increase, although we’re reluctant to do it.”
Vickie Zamora, owner with her husband, Andres, of the
McDonald’s franchise in Santa Fe
and Los Alamos, didn’t want to comment on the impact
of the higher minimum wage.
But she said McDonald’s restaurants, including the
recently remodeled outlet in the 3000 block of Cerrillos Road, are becoming
more automated as labor and other costs, especially energy, continue to
increase.
Raises for minimum-wage workers can also put pressure
on businesses to lift pay for other workers who already make more than the
minimum.
At Eldorado Hotel, about 10 percent of the workforce,
or 31 employees, will see their pay increase Jan. 1 as a direct result of the
minimum-wage ordinance, Verruni said.
Those employees work in housekeeping, the laundry,
the kitchen and the receiving department, he said.
Eldorado will implement a small price increase on
Jan. 1 to keep up with inflation in various costs such as energy and health
care, Verruni said. “We are not raising prices to offset the minimum wage.”
Tom Spray, executive director of Open Hands, a
nonprofit organization that assists the elderly, said the ordinance will
directly affect six workers at his business. Three full-time and three
part-time employees will receive a $1 per hour raise.
“We had planned and budgeted for it,” he said. “We
knew it was coming. It was a question of being prepared.”
|
